15 November 2011

Diamond Solves Financial Woes With Buy Out

As previously reported earlier in 2011 Diamond Aircraft of London Ontario indicated it was in dire trouble and needed a federal government loan or it might not survive.

Company President Peter Maurer said in March 2011 "If we don’t get the funding from the federal government, it puts us in a difficult situation. If the D-JET, for example, in a worse case scenario, were not to continue it would have a negative impact on the rest of the company’s operations...[The debts are] at a level that would be very difficult to satisfy out of piston sales. I’ll let you do the extrapolation."

Of course as we now know the government said "no" and the company went away looking for other options, Maurer oddly saying that he had considered a government bailout a "long shot".

On 13 November the company announced its solution to the crisis. It is now majority owned by Medrar Financial Group, an investment company based in Dubai. The buy-out was for an undisclosed amount.

It is hard not to note the trend here, as I have written before many aviation manufacturers have recently been bought out by middle eastern or far eastern countries. A short list:

* Diamond Aircraft - majority owned by Medrar Financial Group, Dubai* Cirrus Aircraft - Government of the Peoples Republic of China* Continental Engines - Government of the Peoples Republic of China* Liberty Aerospace - 75% owned by the Kuwait Finance House, a wholly owned subsidiary of Kuwait Finance House of Bahrain* Piper Aircraft - Government of Brunei.* Epic Aircraft - partly owned by the Government of the Peoples Republic of China

Once again, though I will make the point that in almost all of these cases investment from North America, Europe and other western countries was not to be found. That means that while many people from North America will shake their heads and say "this is too bad", that is all they will do. They didn't pony up and put money on the table to keep these companies going. The case is the same with Diamond. It is pretty obvious that the choice was simply between selling it to interests from Dubai or shutting it down.

If westerners want to retain ownership of our aerospace industry, then we need to stop the "tut-tutting" and start buying companies out ourselves.